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Managerial tools used to meet or beat analyst forecasts: evidence from the UK

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posted on 2020-07-08, 08:29 authored by Yousuf Khamis Al Mabsali, Robert Hayward, Yasser EliwaYasser Eliwa
This paper examines the tools that managers use to meet or beat analyst forecasts in the post-International Financial Reporting Standards (IFRS) period, using a sample of UK firms for the period 2005 to 2015. Our results are consistent with the view that managers utilize both classification shifting and managerial guidance to hit analyst forecasts. The results suggest that managers are more likely to continue to exercise their discretion in using these two tools following the adoption of IFRS. This paper supports the argument that managers engage in classification shifting, and IFRS adoption is more likely to increase market demand for more disclosures through managerial guidance. In contrast, there is weak evidence to suggest that real earnings management or accrual earnings management are used to hit analyst forecasts. Our results are expected to be of interest to policymakers, regulators, and external auditors.

History

School

  • Business and Economics

Department

  • Business

Published in

Journal of International Accounting, Auditing and Taxation

Volume

43

Publisher

Elsevier

Version

  • AM (Accepted Manuscript)

Rights holder

© Elsevier

Publisher statement

This paper was accepted for publication in the journal Journal of International Accounting, Auditing and Taxation and the definitive published version is available at https://doi.org/10.1016/j.intaccaudtax.2021.100383.

Acceptance date

2020-06-23

Publication date

2021-03-16

Copyright date

2021

ISSN

1061-9518

Language

  • en

Depositor

Dr Yasser Eliwa. Deposit date: 7 July 2020

Article number

100383

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